Microsoft signs huge deal with Walgreens, countering Amazon

As Amazon keeps growing, Microsoft is getting involved with ever more retailers. On Tuesday Microsoft said it has signed a multiyear deal with Walgreens Boots Alliance.

Amazon’s core business still lies in e-commerce — it has expanded in brick-and-mortar retailing through Amazon Go Stores, its Whole Foods acquisition and other efforts — and at times that’s proving to be an advantage to Amazon’s competitors in the cloud business. In the case of Walgreens, Amazon’s recent push into health care looms large. Although the company has kept its intentions closely guarded, it’s making moves like acquiring online pharmacy PillPack and teaming up with J.P. Morgan and Berkshire Hathaway on a long-term plan to improve care and reduce costs for employees.

Under the deal, Walgreens Boots Alliance is signing up more than 380,000 employees for its Microsoft 365 cloud apps offering, including Office 365, Windows 10, and mobility and security tools. The company will move most of its information technology workloads to Microsoft’s Azure public cloud.

Beyond operating Walgreens and Duane Reade stores, Walgreens Boots Alliance has almost 400 distribution centers that deliver to hundreds of thousands of doctors, hospitals, health centers and pharmacies annually, according to its latest annual report. The company acknowledged Amazon’s PillPack deal in the report’s risk factors section.

The deal will also include tests of “digital health corners” within some Walgreens stores, plus cooperation on research and development and software for managing patient engagement and chronic disease.

Microsoft has recently signed cloud partnerships other big retailers including the Gap, Kroger and Walmart. But AWS retains many retail customers, including Brooks Brothers and Under Armour, as well as health-care companies like Bristol-Myers Squibb and Celgene.

This is breaking news. Please check back for updates.

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